The Walt Disney Company has reached a settlement that will see it pay $10 million to address allegations of non-compliance with children’s privacy laws, specifically concerning its handling of content on YouTube. This resolution comes after inquiries by the US Federal Trade Commission (FTC) focused on the company’s failure to properly label certain videos as intended for children, which allowed for targeted advertising without parental consent.
The settlement, finalized with the US Department of Justice, stems from claims that Disney did not adequately classify some of its children’s videos uploaded to YouTube, contravening the Children’s Online Privacy Protection Act (COPPA). This law mandates that creators targeting children under 13 must notify and obtain consent from parents before collecting personal information, including through advertising.
Brett Shumate, an assistant attorney general in the civil division of the Justice Department, emphasized the importance of parental oversight in children’s data collection and usage. He highlighted that the settlement signifies a commitment to adhere to regulations designed to protect young viewers online.
Disney has confirmed its agreement to the terms of the settlement, which specifically pertains to content distributed on YouTube and does not extend to its own digital platforms. The settlement involves Disney Worldwide Services Inc and Disney Entertainment Operations LLC.
This legal action follows a broader regulatory shift initiated after a 2019 settlement between the FTC and YouTube’s parent company, Google, which mandated stricter labeling of kid-focused content. Following that settlement, YouTube required creators to designate videos meant for children, aiming to prevent the collection of personal data and targeted advertising in compliance with COPPA.
The FTC’s investigation revealed that Disney failed to properly identify a number of videos uploaded during the pandemic as targeted toward children. Such oversights reportedly led to the collection of personal data and targeted adverts being served alongside content that should have been protected. The Justice Department noted that since 2020, Disney had uploaded videos across more than 1,250 YouTube channels, with many gaining significant popularity during the early pandemic period.
The government filing indicated that Disney was aware of its labeling missteps as early as June 2020, when YouTube informed the company about reclassifying over 300 videos, including popular titles from franchises like The Incredibles, Toy Story, and Frozen.
Disney’s alleged misclassification has raised concerns over the online safety of children and the company’s responsibility in protecting young viewers from unintended data collection practices associated with digital advertising.
